Income Tax (Trading and Other Income) Act 2005 section 74–75

Commercial letting of furnished holiday accommodation

Sections 74–75 of Schedule 2 deal with transitional amendments to the furnished holiday lettings rules and related pension provisions that applied before 6 April 2006, when the new pension tax regime under Finance Act 2004 came into force.

• Before 6 April 2006, the furnished holiday lettings rules in Chapter 6 of Part 3 were modified so that income from qualifying lettings could count as relevant earnings for pension purposes under the old ICTA pension provisions (sections 623 and 644 of ICTA).
• The equivalent ICTA provision, section 504A, was similarly amended before 6 April 2006 to include references to income treated as relevant earnings for pensions under sections 623(2)(c) and 644(2)(c), while removing references that would only apply under the new regime.
• Once the new pension regime took effect from 6 April 2006, these transitional references to the old ICTA pension provisions fell away, and the unamended versions of sections 322(2) and 328(2) applied instead.
• The Treasury's power to make transitional or consequential orders under sections 281 and 283 of Finance Act 2004 was extended so that it could substitute the post-6 April 2006 versions of sections 322(2), 328(2), and 504A for the pre-6 April 2006 transitional versions, as if the relevant changes had been included in Schedule 35 to Finance Act 2004.